While the global energy sector suffers, due to the coronavirus crisis, IEA expects renewable energy to grow this year

In a new report, the International Energy Agency (IEA) projects a bad year for fossil fuels but a year of growth for the renewable energy sector, this, as the coronavirus pandemic triggers “the biggest shock to the global energy system in more than seven decades.”

According to the report, the Paris-based organization estimates that global energy demand will drop by 6% in 2020.

The “Global Energy Review 2020” report says Covid-19 contributed to global coal demand dropping in the first three months of the year by roughly 8% compared to the same period in 2019. Adding that recovery of coal demand for industry and electricity generation in China could offset larger declines elsewhere.

The report also projects global oil demand could drop by 9%, or 9 mb/d on average across the year, returning oil consumption to 2012 levels.

Gas demand could fall much further across the full year than in the first quarter, with reduced demand in power and industry applications. Nuclear power demand would also fall in response to lower electricity demand.

The IEA said that renewables is the energy source most resilient to the Covid-19 current crisis since it’s set to experience some sort of growth no matter the ultimate shape of the economic recovery.

“Demand is expected to increase because of low operating costs and preferential access to many power systems,” the report said of renewable power generation. “Recent growth in capacity, with some new projects coming online in 2020, will also boost output.”

Renewable electricity generation grew by 3% during the first quarter and accounted for nearly 28% of electricity supply, up from 26% a year earlier. Demand reductions have lifted the share of renewable energy in the electricity supply, as their output is largely unaffected by demand.

For the year, the IEA expects it to grow 5%, with total global use of renewable energy rising 1%. These numbers are lower than projections prior to the coronavirus.

“This is a historic shock to the entire energy world,” Fatih Birol, the IEA’s executive director, said in a statement. “Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil, and gas. Only renewables are holding up during the previously unheard-of slump in electricity use.”

“It is still too early to determine the longer-term impacts,” he said, “but the energy industry that emerges from this crisis will be significantly different from the one that came before.”